Stocks rise again

Published 8:00 pm, Wednesday, April 14, 2010

The Standard & Poor's 500 index topped the 1,200 mark Wednesday for the first time in a year and a half. The Dow Jones industrial average rose 104 points and moved above 11,100.

The good news came from all directions: Earnings reports and government figures on retail sales and inflation indicated that the economy is strengthening.

One of the biggest forces behind the market's climb came from JPMorgan Chase, which reported a better-than-expected profit for the January-March quarter. The bank is still facing big losses from souring consumer loans, but CEO Jamie Dimon said there have been clear improvements in the economy.

The forecast from chipmaker Intel boosted the technology-dominated Nasdaq composite index. Intel posted earnings and revenue after the closing bell Tuesday that topped analysts' expectations. The company also raised its 2010 outlook.

Michael Binger, portfolio manager at Thrivent Investment Management in Minneapolis, said the strong results from leaders of the banking and technology industries are signs that the recovery is on track.

"It diminishes the chance that we go back into a double-dip recession," he said. "It lends credence that the financial industry is recovering and the tech industry is beyond recovering and is doing very well."

A Commerce Department report that retail sales rose again in March added to expectations that consumers are starting to spend more.

The market has been rising steadily for two months on encouraging signs of growth. Some analysts have warned that stock prices have climbed too high but the latest profit reports eased concerns that prices are stretched.

According to preliminary calculations, the Dow rose 103.69, or 0.9 percent, to 11,123.11. The Dow closed over 11,000 on Monday for the first time since September 2008. It is up 2.1 percent in five days, its best advance since early March.

The S&P 500 index rose 13.35, or 1.1 percent, to 1,210.65. Like the Dow, the S&P 500 index is at its best level since September 2008, when the financial crisis began.

The Nasdaq rose 38.87, or 1.6 percent, to 2,504.86. It hasn't been above 2,500 since June 2008.

The stronger signs about the economy hit bond prices and raised yields. The yield on the benchmark 10-year Treasury note rose to 3.86 percent from 3.82 percent late Tuesday.

The dollar fell against other major currencies, while gold rose.

Crude oil rose $1.79 to $85.84 per barrel on the New York Mercantile Exchange.

Strength at JPMorgan Chase's investment bank helped offset losses from consumer loan defaults and propelled the company's profit above analysts' expectations. JPMorgan said it plans to add 9,000 employees in the U.S.

Intel's first-quarter results easily topped analysts' expectations. The results indicated that businesses are stepping up their technology spending on growing confidence about the economy. Intel said its profit margin will be better than it had estimated for 2010 and that it plans to hire 1,000 workers.

JPMorgan and Intel were the biggest gainers among the 30 stocks that make up the Dow industrials. JPMorgan rose $1.86, or 4.1 percent, to $47.73. Intel climbed 75 cents, or 3.3 percent, to $23.52.

CSX, the nation's third largest railroad, rose $2.18, or 4.1 percent, to $55.46 after reporting a 20 percent increase in its first-quarter earnings. The company said it has seen "gradual and steady growth" in the economy. It has also started hiring.

The government offered investors more signs the economy is improving. Retail sales rose 1.6 percent in March, the third consecutive month of growth. That was bigger than the increase of 1.2 percent economists had expected, according to Thomson Reuters.

The Consumer Price Index, a measure of inflation at the retail level, rose 0.1 percent in March. That was in line with economists' forecast.

The Fed has said that inflation isn't a problem. Without an immediate threat of rising prices, policymakers have been able to hold the Fed's key interest rate at a record low of essentially zero. The Fed wants to keep rates low to stimulate lending and help revive the economy.

The Commerce Department also said that businesses added to their stockpiles for the second straight month in February. That signals that companies expect sales to increase.

The Fed said economic activity rose in all of its regions, except in St. Louis. In its last report in early March, only nine regions saw improvements in part because of snowstorms.

Health care, consumer staples and utilities stocks lagged after traders grew more confident about the economy. These industries are seen as safe in weak economies but fall out of favor when business growth is expected to increase.

About three stocks rose for every one that fell on the New York Stock Exchange, where volume came to 1.1 billion shares, in line with Tuesday.